10/14/2014 04:17 EDT | Updated 12/14/2014 05:59 EST

Is Alberta Canada's Next Big Solar Market?

On a bright fall day in early October in a packed ballroom in a downtown Calgary hotel Alberta's new energy minister, Frank Oberle, made his first speech as minister to Alberta's small solar industry.

Solar energy only makes up 0.03 per cent or 5 megawatts of Alberta's 14,000 megawatts of electrical generation capacity but there he was, one of Alberta's most powerful people half-apologizing for his rookie status and talking about how he's got a lot to learn. 

So why was he there? It could have something to do with his boss, Premier Jim Prentice telling the Globe and Mail "We can achieve very significant emissions reductions just by not burning coal" and "I think what we should be doing is making investments in those (wind and solar) areas in the context of an overall climate plan for the province."

Oberle continued on in the same vein.

"[Solar] will be part of our mix going forward, no question... Renewables will play a part in our electricity system going forward," said Oberle in an interview after his speech.

So that might be why CanSIA's Solar West event was crawling with Ontario developers and solar industry folks. The Alberta micro-generation regulation aside Alberta has not provided the most supportive environment for solar energy. But Alberta has the best solar resource in Canada, a deregulated electricity market, looming coal plant retirements and growing demand for electricity.

Kickstarting Alberta's solar industry

While Ontario solar companies are watching, it's existing players who may be best positioned to kick start Alberta's nascent solar industry.

"Over the next few years I think you're going to see more and more large scale systems come on board. I would not be surprised to see that total installed solar capacity number double by next year, there are a lot of large projects in the mix commercial and industrial projects that are moving forward that will help us achieve that," says David Vonesch an engineering partner with Skyfire Energy, a solar engineering, procurement and construction company based out of Calgary.

Vonesch also confirmed that Skyfire will start building two megawatts worth of solar projects in Alberta later this month. When those are commissioned early next year those projects will instantly bump up Alberta's solar capacity by 40 per cent.

These new projects are being developed within the current rules and without any incentives. The economics make sense right now for large users of electricity who plan on staying put. From them solar is going to be the cheapest source of electricity.

Alberta's current micro-gen regulation requires low cost or free interconnection for small projects, but it hasn't been enough for the industry to really take off. That's where the renewable energy framework comes in.  Minister Oberle says the framework is under development that it's "part of a larger framework on Alberta's climate change position."

If that renewable energy framework gets it right and properly recognizes the economic value of solar we could start to see large utility scale projects of 10 megawatts and up.

And Alberta has shovel ready utility scale projects ready to go. There is a 15-megawatt project in southern Alberta that is approved and waiting for financing. However, banks are loath to lend money to businesses they don't understand and long-term power purchase agreements are hard to come by.

But it will come. The banks or the developers will figure out how to finance these projects and the cost of solar is only going down. The International Energy Agency agrees. They just recently released a report saying that solar could become the largest source of worldwide electricity by 2050.

Alberta's market access problem

Alberta is almost single-handedly going to be responsible for nearly all of Canada's growth of greenhouse gas emissions between 2005 and 2020. Dollar for dollar renewable energy projects have the greatest potential to reduce emissions and enhance Alberta's flagging reputation at the same time.

Alberta burns more coal than the rest of Canada combined and it has the carbon emissions to prove it. Premier Prentice is talking about the right things in reducing coal and beefing up renewable energy.

John Gorman is the president of the Canadian Solar Industries Association and he sees solar as an opportunity for the Alberta government to address its dirty electricity problem and an immediate win as far as GHG reductions go. And it's hard to argue, the single biggest greenhouse gas reducing project the Alberta government has funded through its carbon levy program was the 300 megawatt wind project, Blackspring Ridge.

Will Alberta become the next great solar electricity market in North America? Not right away, but things are looking up for this province's plucky solar industry.